[alakin]

It's pretty interesting to think about happens from an economic perspective. Say I buy a house on loan (money withdrawn from capital markets). I hand cash to the previous owner and they use it to pay back their loan (return money back to the capital markets, keep the difference).

Consider the synchronous chain. Me: Myprofit=future_profit-cost1 Prev owner: profit=cost1-cost2 Prev owner 2: profit=cost2-cost3 And so on...

Also consider a parallel behavior where I can simultaneously buy and sell multiple properties though debt.

It would be fun to model this whole chain and understand what this recursively unfolding process actually does with capital. Is it a capital sync? What behavior does it incentivize? Does it guarantee expansion/recession cycles?

[chii]

the capital consists of pre-existing capital, and newly created capital from debt (from a bank). This is literally how money is created (vs direct printing from the Feds).

And it does guarantee recession and expansion, as explained here by ray dalio https://www.youtube.com/watch?v=PHe0bXAIuk0